Netflix, Inc. (NASDAQ: NFLX)
On Wednesday, Reed Hastings, CEO of Netflix stunned markets with an unexpected announcement that the company’s video streaming service is now live in an additional 130 countries, bringing their total footprint to 190 countries. Netflix is now available virtually worldwide with the exception of China. During an otherwise ugly day of selling for the equity markets, investors and traders swarmed to Netflix driving the stock up 9.3% and registering the biggest daily gain in almost six months.
NFLX Outlook
Netflix had previously disclosed plans for an aggressive worldwide expansion that would be completed by the end of 2016, and many analysts were skeptical, suggesting that those plans were too ambitious. Now, with the expansion instead launched entirely at the beginning of the year, investors assume that both the company’s and analyst’s subscriber and revenue projections for 2016 may have been dramatically understated. By all accounts Netflix goal of globally transforming the entertainment industry is ahead of schedule.
In a prepared statement, Netflix co-founder and CEO Reed Hastings said, “Today you are witnessing the birth of a new global Internet TV network. With this launch, consumers around the world — from Singapore to St. Petersburg, from San Francisco to Sao Paulo — will be able to enjoy TV shows and movies simultaneously — no more waiting. With the help of the Internet, we are putting power in consumers’ hands to watch whenever, wherever and on whatever device.” PR Newswire
NFLX Technical Analysis
Netflix was the number one top performing stock in the S&P 500 for 2015, gaining 134% and closing the year at $114.38. The stock reached all-time highs of $133.27 in early December and yesterday hit a low of $104.96 before breaking out. NFXL could remain in-play for a long time and at the very least there will likely be plenty of tradable action running into and after earnings are reported on January 19. On the daily chart resistance is visible at $119.02 and $199.60. Above that the stock tends to pause or reverse at the whole and half dollar levels. More recently the stock has developed a congestion range between $117.70 and $118-30. NFLX did stall in that range yesterday during end of day and after-hours trading. On weakness the stock could find support for a pause or bounce at $117, $116.43, $116, $115 and $114.43. These are short-term levels, and a catalyst or an active market in either direction could blow the stock through any support or resistance. If I trade NFLX, my plan will factor in the stock’s wide spreads and very quick moves.
Netflix Company Profile
Netflix, Inc. is a provider of Internet television network. The Company has over 57 million streaming members in over 50 countries. Its members can watch more than two billion hours of television (TV) shows and movies per month, including original series, documentaries and feature films on Internet-connected screen. The Company has three operating segments: Domestic streaming, International streaming and Domestic DVD. The Domestic and International streaming segments derive revenues from monthly membership fees for services consisting of streaming content. The Domestic DVD segment derives revenues from monthly membership fees for services consisting of DVD-by-mail. Its members can play, pause and resume watching, all without commercials or commitments. Additionally, in the United States, its members can receive DVDs to their homes. The Company offers streaming service both domestically and internationally. Google Finance
